USE CASE | South African ‘Big 4’ Bank, First National Bank, Considers Blockchain to Digitize Over 1 Million Customer Title Deeds

South African banking giant, First National (FNB), is considering applying blockchain technology to digitize its customers’ title deeds.

The CEO of First National Bank, Jacques Celliers, disclosed this information during a comprehensive interview following FNB’s announcement of its financial results for the year ending on June 30 2023. Nonetheless, Celliers said the bank is still not open to cryptocurrencies.

In November 2019, FNB made the decision to close bank accounts associated with cryptocurrencies which sparked considerable dissatisfaction among local digital currency participants. The bank informed crypto exchanges that their accounts would be terminated in 2020, citing concerns about the risks associated with digital currencies.

After FNB’s initial announcement, several other major banks in the country also decided to follow suit by refusing to provide services to accounts associated with cryptocurrencies.

Cellier’s refusal of crypto comes despite a decision by the South African Reserve Bank’s Prudential Authority to issue a guidance notice to the big banks to start working with crypto players. According to the note, local banks may have been put off by the lack of regulations to manage CASPs, as well as uncertainty about the risks the assets may pose to key security areas like money laundering and terrorist financing.

Nevertheless, Celliers views blockchain as an innovative technology that has the potential to streamline the process of acquiring title deeds.

“There is a technology called blockchain, the architecture below crypto. We are leveraging that technology. Many of our customers do not have title deeds to their properties; so, we are trying to find a way to help our customers get e-titles.

We are also playing with lots of innovations within the trade space to see if there is a better way of leveraging the technology.”

The implication of adopting blockchain technology is that ownership of each property record will be managed on its own digital ledger, rather than relying on traditional paper-based title deeds for updates and record-keeping.

South African reportedly has a backlog in processing title deeds, currently standing at over a million houses, which amounts to an estimated R242 billion ($12.7 billion) in assets that should be in the hands of South Africa’s poorest households.

“On crypto assets, we are not participating in any of that at this stage,” noted Celliers.

“From an investment perspective, we need to cater for all asset classes; so, as soon as that asset class reaches a certain level of maturity, we will obviously participate in that opportunity.”

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